1
Q
Evaluation of Fiscal Policy
A
Disincentives to work
Reduced public services
Poor information
Time Lags
Increase in budget deficit
Depends upon other components of AD
Monetarist Critique
Depends on size of the multiplier
2
Q
Economic Effects of Government Borrowing (consequences of a budget deficit)
A
Increased aggregate demand (AD)
Higher taxes and lower spending
Loss of Confidence
Higher debt interest payments
Crowding out
Increased Interest rates
Inflation
3
Q
Advantages of Govt Borrowing
A
Govt Borrowing can be beneficial under certain conditions - recession
Investment
Bailout key industries
economics macro
flashcards
Decks in class (30)
# Cards
-
Economic growth/cycle14
-
Recessions4
-
inflation15
-
Deflation4
-
fiscal policy11
-
fiscal policy - government borrowing10
-
Monetary Policy10
-
Unemployment11
-
Balance Of Payments11
-
International Trade6
-
Globalisation10
-
Exchange rates7
-
Euro / Monetary Union6
-
Measures to Increase Competitiveness / Supply side policies2
-
Taxation8
-
supply side policies5
-
Comparative advantage (terms of trade)7
-
European union5
-
transmission mechanism (monetary policy)1
-
trade protectionism (look at quotas)6
-
Laffer curve2
-
types of unemployment4
-
single market4
-
standards of living0
-
benefits of consumption0
-
diamond model0
-
tax brackets0
-
fiscal policy multiples3
-
external shocks10
-
How a big country effects the UK (Would a Chinese slowdown cause a recession)4
